Orbotech shareholders approve acquisition by KLA-Tencor

Orbotech CEO Asher Levi, photo: Eyal Yitzhar

The South Korean Supreme Court dismissed an appeal against Orbotech in an intellectual property case.

A meeting of shareholders of Orbotech Ltd. (Nasdaq: ORBK) today approved by a large majority the sale of the company to KLA-Tencor for over $3 billion. Approval, which was expected, is part of the procedures that the company must go through in order to complete the deal.

Meanwhile, just before Orbotech becomes part of KLA-Tencor, the company has disposed of a prolonged legal proceeding in South Korea. The South Korean Supreme Court dismissed the prosecutor's appeal of the Seoul Central District Court's (Appellate Division) 2014 decision acquitting the company's South Korean subsidiary and five of its employees of unlawful acquisition and divulgence of confidential technical information.

Orbotech provides technologies used in the production processes for electronic products. The company was acquitted by the Seoul Central District Court, but the prosecution appealed. It was alleged that Orbotech was involved in the theft of sensitive information from Samsung. Had Orbotech lost, it would have had to pay a fine of 1.3 billion South Korean yen ($1.3 million). The amount was not large and would have been covered by insurance in any case; losing the case, however, could have damaged Orbotech's relations with customers. Orbotech recognized up to $25,000 in annual expenses for the legal proceedings for the past three years.

Orbotech CEO Asher Levy said, "Orbotech and our Korean subsidiary are very pleased that the Korean Supreme Court has vindicated Orbotech in this matter which has been ongoing since 2012. We understand and appreciate the importance of intellectual property and its central significance as a core asset of any company. For this reason, we maintain and enforce policies designed to protect the intellectual property of both the company and third parties."

In the Orbotech acquisition deal, KLA-Tencor will pay $38.86 in cash and 0.25 KLA Tencor shares for each Orbotech share. The proceeds amounted to $69.02 per share - a total of $3.4 billion, but KLA-Tencor's share price has since fallen to a price reflecting proceeds of $64.68 per share, thereby reducing the value of the deal to $3.2 billion (the final price will be determined on the completion date).

Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Orbotech CEO Asher Levi, photo: Eyal Yitzhar
Orbotech CEO Asher Levi, photo: Eyal Yitzhar
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